JAYWANTRAJ PUNAMIYA AND ORS. versus M/S. H. CHOKSI AND CO. PVT. LTD.

Citation: [1997] 1 S.C.R. 862 · Decided: 03-02-1997 · Supreme Court of India · Bench: K. RAMASWAMY, G.T. NANAVATI · Disposal: Dismissed

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Judgment (excerpt)

A 
JAYWANTRAJ PUNAMIYA AND ORS. 
v. 
M/S. H. CHOKSI AND CO. PVT. LTD. 
FEBRUARY 3, 199T 
B 
(K. RAMASWAMY AND G.T. NANAVATI, JJ.] 
Code of <;ivil Procedure 1908 : Order 23-'-Rule 3. 
Compromise decree-En[ orceability of-Application for recording com-
e promise filed by parties during pendency 'of appeal-Refusal by appellate 
Court to record compromise-High Court recording a finding that it being a 
compromise contingent upon the parties appointing a mediator, it cannot be 
recorded under Order 23 Rule 3-Appea~eld the compromise was a 
contingent contract dependel!f upon action of third party-Hence it cannot be 
D said that there was complete agreement-Thus the very object of recording the 
compromise was to ensure that the dispute 'reaches its finality and does not 
lead to further litigatiort-ln this case, since the dispute was not finally 
resolved, but the compromise was contingent upon action by third party, it 
did not receive finality-The High Court was right in holding that the matter 
had not received finality and though it was a part of the decree, it cannot be 
E recorded untf.er Order XX/I/, Rule 3, CPC. 
F 
G 
Mt. Akbati Begum v. Rahmat Husain & Ors., AIR (1973) All. 861 F.B. 
and Katikarll Chilltamani Dora & Ors. v. Guntreddi Annamnaidu & Ors., 
[1974) 2 SCR ·655, distinguished. 
CIVIL APPELLATE JURISDICTtON : Civil Appeal No. 702 of 
1997. 
. 
From the Judgment and Order dated 10.1.97 of the Bombay High 
Court in C.R.A. No. 9 of 1997. 
C. Sitaramiah, A.M. Khanwilkar and Mrs. V.D. Khanna for the 
Appellants. 
The following Order of the Court was delivered : 
· H · 
Leave granted. 
862 
-
JA YWAN1RAJ PUNAMIA v. H.CHOKSI AND CO. 
863 
This appeal by special leave arises from the judgment and order A 
dated January 10, 1997 passed by the Bombay High Court in Civil Revision 
Application No. 9/97. It is not in dispute that while the appeal was pending 
an application under Order XXIII, Rule 3, CPC was filed for recording 
the compromise. The appellate Court refused to record the compromise 
and on revision, it was dismissed. Thus, this appeal by special leave. 
B 
The compromise memo annexed as Annexure A at page 21 of the 
paper book records that 'We, the undersigned Shri Harshan A. Mehta, 
Director of H. Choksey & Co. Pvt. Ltd. and Mr. Jayavantraj Punamiya, 
Director of M/s. Sundeep Plastics Pvt. Ltd. do hereby appoint Shri Mohan-
lal S. Mehta to sell 2 galas being No. D/8 and AB/i4, situate at Nandanvan C 
Co-operative Industrial Estate Ltd. at Thane." The High Court recorded 
the finding that it being a compromise contingent upon the parties appoint-
ing Shri Mohanlal S. Mehta as a mediator, it cannot be recorded under 
Order XXIII, Rule 3, CPC. Shri Sitaramaih, learned senior counsel for the · 
appellants contends that once parties have agreed to refer the matter to D 
a third party to settle their dispute, it can be enforced wider Order XXIII, 
Rule 3, CPC. In support of his contention, he relies upon a decision of the 
Allahabad High Court in Mt. Akbari Begum v. Rahmat Husain & Ors., AIR 
(1973) Allahabad 861 F.B. He also relied upon the judgment of this Court 
is Katikara Chintamani Dora & Ors. v. Guntreddi Annamnaidu & Ors., 
[1974] 2 SCR 655. Having given consideration to the contention of the E 
learned counsel, we think that in the facts and circumstances of this case, 
he is not right. It is seen that no doubt the parties have settled the terms 
of the compromise for reference of the matter to Mohanlal S. Melita, and 
as agreed upon, he will dispose of the two galas and after adjusting the 
outstanding and deducting· the expenses, the balance would be given in F 
equal shares to the parties. Shri Sitaramaih has placed before us the 
evidence of Shri Mehta wherein he has suggested that he is willing to sell 
the property. It has been noted by the learned District Judge that Shri 
Mohanlal S. Mehta did not take steps to sell the disputed flats. Hence it 
cannot be said that there is complete agreement. The compromise is a 
contingent contract dependent upon action of third party, i.e., making G 
adjustment. Thus, the very object of recording the compromise is to ensure 
that the dispute reaches its finality and does not lead to further· litigation. 
In this case, since the dispute was not finally resolved, but the compromise 
was contingent upon action by Shri Mohanlal S. Mehta, it did not receive 
finality in that perspective. The Allahabad High Court had to consider the H 
864 
SUPREME COURT REPO

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